Tuesday, January 27, 2015

Charts 01-27: Triplets, not a triangle

A very long-running ending-diagonal top.  /ES futures getting excited, I have a target for a final high of 2096-2097 SPX late Thursday or early Friday as a reaction off Q4 GDP.

Even when we're having a hard time getting a read on all of this, we still owe it to ourselves to bang out some sort of wave count.

Good luck to all ...

SPX 01-27


Christian Gustafson said...

Bollinger Band watchers have to notice that the bands on the SPX daily are tightening VERY fast.

Upper daily SPX BB now at 2080, roughly the December 5 high.

This may lend support to Bicycle's theory that we experience a wave "failure" up here, that we get a final push up that we count as a "5th wave" or whatever, but which fails to make a new high.

The resulting move off that kind of turn should be violent.

Bicycle said...

This is why I am kicking myself for not placing large, long term no-leverage shorts at the high at the very end of 2014. We might not get another new high like we were hoping.

If you look through some of the individual Dow components you also see some failures like this on some of the very long term charts.

It also lends credence to the thought that the end of the Supercycle will not be brought on by something purely technical, but by some geopolitical event or other surprise that is obvious to everyone, including all mom and pop 401k, and everyone tries to get out the one single exit of the burning building all at the same time, clogging it shut.

Phat Repat said...

So perhaps a double top then failure? Must be nimble, must be quick... ;-)

Bicycle said...

Well.... shoot. We just fell out the bottom of the pennant. And it shows our rising wedge as not having yet put in 4, or it's not a wedge at all (this is the higher probability).

Back to the drawing board.

Bicycle said...

Are we done? Is it this simple?

Bicycle said...

We are perched literally right on top of the megaphone.

1. This is an overthrow, the patterns are valid, and a collapse wave is imminent.

2. The patterns are not valid bear patterns and we are headed to hyper new highs in the larger wedge forming since the early 80's.

Phat Repat said...

Yep, Jack got singed... Out with a minor gain.

Ugly, no other word for it. Running numbers and probably should have reversed but couldn't be at the computer. Let's see how Bicycle's charts play out.